Will Rise of Tablet Computers End Up Killing the Laptop?

Ever since Apple introduced the iPad earlier this year, some tech experts have predicted that consumers will all but abandon their laptops for lighter and more compact tablet computers.

Certainly the huge success of the iPad and the growing list of imitators—along with a big drop in laptop sales—has fueled that perception.

Source: RIM

The Blackberry Playbook Tablet PC

But others in the industry believe the expected demise of the laptop may be premature.

Instead, the line between laptop, tablet computer and smartphone will likely blur as a variety of new products emerges that will appeal to different types of consumers.

As a result, investors will be watching closely just how quickly laptop makers such as HP , Dell , Acer and Samsung adapt to this new environment.

Few expect the laptop to go away completely. And the question remains whether tablets could ever fully replace a laptop.

“That is the great debate,” says Rhoda Alexander, Director Monitor Research for IHS iSuppli Corporation. “My perspective is that the iPad is having an impact.”

Alexander suggests that the major PC vendors including HP and Dell are already moving quickly to develop their own tablet devices. But it won’t just be a case of copying the iPad, she adds.

“They will likely take a twin approach to it,” says Alexander. “This means they’ll continue with a full OS tablet but in a slate form factor, as well as offering a mobile operating system version.”

At present, she says, the markets are developing side by side, with a substantial portion of the tablet sales occurring as added devices.

However, the long term could be a very different story, especially if tablets develop full-function operating systems that can manage the same tasks as laptops.

One vendor, China-based Lenovo , is gearing up to bring its own tablet to market, first in its native China in the New Year and to the North American market by March or April.

Rory Read, president and COO at Lenovo, says this device, called the Lepad, could be a mobile “third screen,” between the traditional laptop and smartphone.

“The Lepad is going to be an interesting convergence of technologies between the laptop, the smartphone and all smart devices," Read said in a recent interview on CNBC Asia. "That trend is going to drive innovation for the next three to five years.”

For now, there are strong doubts that there is room in the market, let alone inside business traveler’s carry-on bags, for another device. Yet the convergence of the devices could drive innovation, and with it the market.

“People are already carrying two screens, and I don’t see it going to a third,” says Rob Enderle, principal analyst for the Enderle Group. “The tablet is going to have to replace one of them and most of us think it could replace the laptop.”

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The new tablet 'NAZ-10 tablet' by Nvidia.

Some business travelers certainly agree, noting that the tablet in its current form is certainly a good device for digesting content on the go.

“The long battery life coupled with the apps, entertainment and reader functionality makes it the perfect traveling companion,” says Erica Dublin, founder of the travel site SeeJaneFly.com. “Making a decision to purchase one becomes a lot easier when you know this isn’t just another work device. Tablets can be a lot more accessible than a smartphone or laptop for travelers.”

However, most experts agree that the tablet as it currently stands is not a very good content creation device, which is what many business road warriors need most.

“Depending on what you are doing,” says Alexander, “it can be easier to do on a notebook. But as these tablets mature and add more functionality, they will have better creation elements built into the system.”

Thus the tablet’s biggest drawback remains the lack of a keyboard, and while there are wireless keyboards for the iPad and other slate devices, Enderle says that once you add a stand for the screen and a keyboard, you pretty much have a laptop minus the hinge. This in itself doesn’t reduce what you’re bringing, and these issues could well be signs and portents for the future.

“There has already been a reset on how people are using the iPad,” says Enderle. “Early iPad people thought it was going to be ‘my everything device,’ but since it came out, half the people I know have gone back to notebooks. What is interesting is that they have moved to an Apple notebook not a Windows machine.”

The other factor to consider, says Enderle, is that no other product in the category has been as successful as the iPad. He notes that the Samsung Galaxy had good sell to numbers, but not good sell through numbers at retail, and we could see history repeating itself. There is a chance, he says, that the tablet market could wind up like the digital music player market: dominated by Apple.

There were of course MP3 and other digital music players before the iPod arrived, but since its release in late 2001, it has dominated the market. Says Enderle, “There is a chance the same thing could happen here.”

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Apple iPad

However, despite these warnings, the Apple iPad factored into Gartner’s PC sales prediction for this year. With just five weeks remaining in 2010, Gartner cut its forecast for PC shipments.

Gartner Research Director George Shiffler stressed that forecast reductions actually reflected a general re-thinking of its forecast for mobile PC sales to the U.S. and Western European home markets, based on the impact of the Apple iPads as well as other media tablets including those made by traditional PC vendors.

“Our forecast assumes other vendors like HP, Dell, Acer and Samsung will offer their own versions of a media tablet that will be more competitively priced relative to mini-notebooks and low-end standard mobile PCs than the iPad,” says Shiffler. “And that’s what drives a lot of the expected tablet growth, but at the expensive of mobile PC sales.”

However, IHS iSuppli’s Alexander stresses that the rumors of death for the netbook have been exaggerated, especially as they remain a functional machine for the education sector, but adds that the iPad could be poised for growth in this market as well.

“When we look at Apple’s production figures for next year, we anticipate that they will target the educational market, which has always been a strong sector for the laptop.” Alexander says that there is a lot to be said for a tablet for a child, as it is a very intuitive device that doesn’t take a lot to bring people up to speed to use. “It could be interesting to see how it plays out.”

She says that in the end, the ultimate winner could be the vendor that figures out to make a solution as fast, responsive and easy to use as a media tablet, “but with the full power of a notebook PC.”

Enderle agrees. “We are looking at a change to laptop-like products. The tablets are good for browsing and reading, but it is hard to work on. The iPad and other media tablets will force laptops to evolve. It is going to be the company that doesn’t look for change that will be passed by like they were standing still.”